It's a Whole New Board Game, James Hardie Expands to Meet Record Demand for Cement Based Building Products

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated: Houston, Texas). Recent economic indicators have set off excitement for the growing building products market in the U.S. Historically low interest rates, over the past few years, have spurred a prolonged residential housing construction boom. This is supported by a recent government report announcing July as the highest month for residential construction activity in nearly 17 years. Some analysts are saying that the residential building boom has peaked, and as interest rates continue to inflate housing starts will begin to taper off.

The strong housing market, over the past few years, has allowed building product manufacturers, such as James Hardie Building Products USA (NYSE:JHX) (Mission Viejo, California), a subsidiary of James Hardie Industries Limited (Sydney, Australia) to expand operations. Several recent developments by James Hardie aim to take advantage of growing markets for its fiber cement roofing and siding products. James Hardie controls about 11 percent of the U.S. exterior building products market, and the company expects its share of the market to grow to about 20 percent by 2007. Its fiber cement based products are taking greater market share from wood and vinyl products.

The most recent move by James Hardie is into the roofing products market. James Hardie estimates the U.S. market for roofing materials is more than 13 billion square feet a year. James Hardie has started operation of a new fiber cement roofing product pilot plant (Plant 1061684) in Fontana, California. The $12.5 million project was completed recently. In the next 8-10 weeks the company will spend an additional $2 million to automate the back end of the process, which is currently done manually. Grenzebach (Hamlar, Germany) will supply the material handling systems for the automation. In one to two years, the company plans to construct a $50 million commercial scale plant (PEC 06004148).

James Hardie may be looking to capitalize on the success of roofing products manufacturers, like privately owned Eagle Roofing Products, which itself has announced a series of West Coast and Rocky Mountain region manufacturing expansions. (See related archived article: California Based Concrete Roofing Tile Manufacturer Growing by Leaps and Bounds)

James Hardie has also announced the construction of a new HardieTrim(TM) production line on 20 acres adjacent to its plant (Plant 1043708) in Peru, Illinois (PEC 09003202). The company is completing design and plans to start construction late this year on the $50 million plant.

The company is also planning to construct a grassroot fiber cement siding manufacturing plant in Elk Grove, California. The $47.5 million project (PEC 06004133) will involve the construction of a 225,000 square foot building to produce 300 million square feet per year of fiber cement siding.

James Hardie currently has a capacity of 2.33 billion square feet per year of flat sheet. These expansions will boost flat sheet capacity up to 2.79 billion square feet per year.

Click on the image at right to view a listing of James Hardie's U.S. manufacturing plants.

These most recent expansions are just an extension of an expansion and acquisition program that has been in the works since the late 90's. In 2000, the company acquired Temple Inland's Waxahachie fiber cement siding plant and initiated a $21 million upgrade (PEC 01008203) to the plant.

In late 2001, James Hardie purchased Cemplank's plants in Blandon, Pennsylvania and Summerville, South Carolina (Plant 1035326) adding about 490 million square feet per year of capacity.

In 2002, James Hardie finalized the sale of its gypsum wallboard business to BPB PLC (England) bringing to an end its gypsum business and emphasizing its corporate focus on its fiber cement business.